The US investment-grade corporate bond market experienced its weakest post-Labor Day issuance period since 2020. This downturn comes after a record-breaking summer, where August 2026 issuance reached approximately $130 to 145 billion, significantly exceeding the post-2019 average of about $95 billion for that month.
Year-to-date issuance through August 2026 exceeded $1.68 trillion, representing a 27% increase compared to the same period last year. Full-year forecasts for 2026 had previously pointed toward a total of $2 trillion or more in investment-grade issuance.
The current lull is attributed to market volatility and 10-year Treasury yields reaching multi-year highs, causing corporate CFOs to delay borrowing. Despite this, credit spreads have remained in the 70 to 80 basis point range, and average yields near 5% have maintained buyer interest.
The high issuance pace in the first eight months of the year was driven by the need to refinance pandemic-era debt and aggressive bond market activity from tech giants like Meta, Amazon, Alphabet, and Oracle. These companies are funding capital expenditure programs for AI infrastructure and data centers.